eDreams ODIGEO June 2014 Quarterly Results - 20140829 · 2016-02-08 · Meta partner impact − Higher merchant costs by 3.2 pts vs last year due to an increased weight of ... revenue

First Quarter, Ended June 30, 2014

Results presentation

� Certain statements included or incorporated by reference within this presentation may constitute “forward-looking statements” in respect of the Group’s operations, performance, prospects and/or financial conditionand the industry in which the Group operates. By their nature, forward-looking statements involve a numberof risks, uncertainties and assumptions and actual results or events may differ materially from thoseexpressed or implied by those statements. Accordingly, no assurance can be given that any particularexpectation will be met and reliance should not be placed on any forward-looking statement. Additionally,forward-looking statements regarding past trends or activities should not be taken as a representation thatsuch trends or activities will continue in the future. Statements in this presentation reflect the knowledge andinformation available at the time of its preparation. The Group does not undertake any responsibility orobligation to update the information in this presentation, including any forward-looking statement resultingfrom new information, future events or otherwise. Nothing in this presentation should be construed as a profitforecast.

� This presentation does not constitute or form part of, and should not be construed as, an offer or invitation tosell, or a solicitation of any offer to purchase or acquire any securities or related financial instruments of thecompany, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on inconnection with, any contract or commitment or investment decisions relating thereto, nor does it constitute arecommendation regarding the securities of the company. Past performance cannot be relied upon as a guideto future performance and persons needing advice should consult an independent financial adviser.

� This presentation has been sent to you in an electronic form. You are reminded that documents transmittedvia this medium may be altered or changed during the process of transmission and, consequently, neithereDreams ODIGEO nor any of its subsidiaries, including Geo Travel Finance S.C.A. and Geo Debt FinanceS.C.A., nor any director, officer, employer, employee or agent of theirs, or affiliate of any such person, acceptsany liability or responsibility whatsoever in respect of any difference between the presentation distributed toyou in electronic format and the hard copy version available to you on request.

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1

Disclaimer

Highlights of Q1 Results - CEO

Drivers of Margin Evolution - CFO

Key Strategic Initiatives- CEO

Outlook - CEO

Appendix

3

Investor presentation – Quarter ended June 30, 2014

Key financial highlights

In light of the current market environment and the increase in

competition, results in the quarter ended June 2014 have been

impacted.

� Revenue margin up +5% YoY

− Core markets (61% o/total) flat due to France and

Italy . Spain has performed well

− Expansion (39% o/total) growing at 13% YoY

driven by markets outside of Europe

� Adjusted EBITDA margins at 21% for Q1 FY 14/15

− Mainly impacted by a number of sudden industry

developments

− Numerous initiatives in place to mitigate this impact

� Stable Debt Coverage level at 3.19x vs last year (3.18x)

despite reduction in EBITDA

� Deleveraging – Repayment of €46 million of debt on the

30th of May, this amortization of debt will imply an annual

reduction in financial expenses of €5 million.

Source: Management accounts, unaudited

Revenue margin growth

Adjusted EBITDA Margin

31%

21%

0%

5%

10%

15%

20%

25%

30%

35%

Adjusted EBITDA

margin

Q1 Jun.13

Adjusted EBITDA

margin

Q1 Jun.14

as

a %

of

reve

nu

e m

arg

in €31.8 m

€22.5 m

4


Revenue Margin Core and Expansion

Revenue Margin - Core

Revenue Margin - Expansion


66.1 66.1

-

20

40

60

80

Revenue margin

Q1 Jun.13

Revenue margin

Q1 Jun.14

In €

mil

lio

n

0%

36.9 41.6

-

20

40

60

80

Revenue margin

Q1 Jun.13

Revenue margin

Q1 Jun.14

In €

mil

lio

n

� Core segment flat on revenue margin

� France and Italy more impacted than Spain, which has performed well

� Expansion segment continues to drive revenue margin growth with 13% YoY growth

� New launch of countries like Russia

� Good performance of some recent launch (NL) or existing countries (US)

64% 61%

36% 39%

Core markets: France, Spain & Italy

Expansion markets: Germany, Austria, UK, Nordics and others

xx% % of total revenue margin

5


Non Flight Rev growth of 22% drives total Rev Growth

Revenue Margin - Flight


� Flight revenue margin growth 1%

� Non flight revenue margin grew by 22%

− Driven by strong results in non transactional revenue (advertising and meta, growing by €2.5 million, or 1.9x YoY; €0.5 million is organic growth and €2 million coming from Liligo acquisition), hotels and cars (4th quarter impact of platform change) and other projects around payments revenue.

Revenue Margin - Non flightNon Flight Contribution to Revenue margin

17%20%

5%

10%

15%

20%

25%

Q1 Jun.13 Q1 Jun.14

in %

of

reve

nu

e m

arg

in



Key Strategic Initiatives - CEO

Outlook - CEO

Appendix

7


Variable Costs

55.0% 55.9% 55.0%59.1%

55.8%60.5%

55.3%

63.2% 65.2%

0%

10%

20%

30%

40%

50%

60%

70%

Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14

as

a %

of

rev

en

ue

ma

rgin

Note: Unaudited

Variable costs as a % of revenue margin

� Variable costs increased by 9.3 pts vs last year mostly as a result of:

− Higher acquisition costs by 5.7 pts vs last year reflecting:

� Competitive pressures and changes on Google Algorithm

� Meta partner impact

− Higher merchant costs by 3.2 pts vs last year due to an increased weight of International

− Higher call center costs by 1.3 pts vs last year as a result of internal decision to increase quality levels, in particular in France, which has been suffering from aftermath of strike and failure of a key outsourcer in Q1 and Q2 2013.

13.6 13.0

17.6

14.0 14.8

-

2

4

6

8

10

12

14

16

18

20

Jun-13 Sep-13 Dec-13 Mar-14 Jun-14

in €

mil

lio

n

8


Fixed Costs

13.2%% of RM 11.8% 17.8% 12.0% 13.7%

Note: Unaudited

Fixed costs – in value and % of RM

� In quarter ended June 2014, fixed costs increased largely driven by an increased focus to invest in engineering capabilities to adapt to the new market situation and deliver on our growth expectations (in internationalization, mobile, meta, white label, ancillaries)

31.8

22.5

(5.0)(1.0) (0.7)

(2.6)

0

5

10

15

20

25

30

35

Adjusted EBITDA

Quarter ended Jun-13

Competitive pressure

& Google algorithm

Meta partner Fixed costs Other Adjusted EBITDA


In €

mil

lio

n

9


Adjusted EBITDA - BridgeAdjusted EBITDA bridge – Quarter ended June 2014 vs quarter ended June 2013

Note: Unaudited. Calculation methodology on page 39

� Quarter Performance strongly impacted by important and sudden changes

− Important change in Google Algorithm making it unprofitable to bid for certain airline-branded keywords

− One of our Metasearch Partners, decided to eliminate certain traffic driving options, which had driven significant

volumes at profitable levels to us

� Increased competitive pressure, the impact of which was magnified by the above changes

� Factors above affect the whole industry, and in this environment we are still holding an advantage in profitability

� Factors above have resulted in both (1) a decrease in Bookings and Revenue Margin, and (2) an increase in cost per

booking

� Increase in Fixed costs, particularly to strengthen our Technology function

(*) Approx. 60% of this amount is driven by the negative effect of the increase in merchant costs and customer service costs, partially offset by positive effect of Liligo and new GDS contract

Increased ease of access to Ryanair inventory for all OTAs in general has affected us negatively in Italy but for the aggregate of eDreams ODIGEO we have a positive effect on EBITDA YoY

(*)

10


Google algorithm change and increased competition

Note: Unaudited

19.6%

(5.3)%

(10)%

(5)%

+0%

+5%

+10%

+15%

+20%

+25%

Quarter ended Mar-14 Quarter ended Jun-14

YoY

va

ria

tio

n i

n p

urc

ha

ses

13.7%

23.1%

+0%

+5%

+10%

+15%

+20%

+25%


YoY

va

ria

tio

n i

n p

urc

ha

ses

Airline branded keywords

Other non branded keywords

� Airline Branded Keywords have been strong traffic and profit drivers historically

− Bookings from this category growing at 20% as of quarter ended March 2014

− Changes in Google changed landscape to -5% YoY , and worse cost per booking

� eDreams ODIGEO reacted to maintain revenue growth by increasing marketing expenditure on non-branded keywords:

− Growth from 14% to 23%

� This had a double impact on profitability

− First, we moved traffic from a cheaper category (for us, given our former quality score) to a more expensive one

− Second, we increased competitive pressure and costs on the expensive category

Quarter-on-quarter orders growth

0%

5%

10%

15%

20%

25%

30%

35%

11


Competition by low margin players in some markets

Google click share index(1) - Italy

Google click share index(1) - Germany

� Number of smaller competitors have increased pressure in short term in what appear to be unsustainable manner

− Competitor X (in Germany and UK) and Competitor Y (in Italy)

− Other small players

Note: Unaudited(1) : Internal analysis based on Google data for certain travel keywords - indexed

eDreams.it

Competitor Y

0%

5%

10%

15%

20%

25%

Competitor X

Opodo.de

Q1 Starts Q1 Finishes

12


Meta partner

Note: Unaudited

(5.1)%

(25.1)%

(30)%

(25)%

(20)%

(15)%

(10)%

(5)%

+0%


YoY

va

ria

tio

n i

n o

rde

rs

� One meta partner eliminated co-search boxes in certain geographies, and changed some display rules which particularly impacted eDreams ODIGEO market share

� Losses mostly concentrated in France and Italy

� Losses were in some of our most profitable routes

� Actions have been taken to address this and the previous issues, and will be explained later in the presentation

Meta partner – YOY orders growth

13


Overview of results

1 EBITDA adjusted for non recurring items and IPO related expenses2 Net income adjusted for non recurring items, IPO related expenses, capitalised fees reversed following refinancing, Impairments and amortizations, cancelation of hedging contracts, LTI deferred tax, deferred tax assets related to tax losses carried forward and interests related to Subordinated convertible shareholder bonds3 IFRS net debt is calculated after deducting the financing fees capitalised

Adjusted net income2

Cash – End of period

Var %Q1

June.14

Q1

June.13

Revenue margin

Adjusted EBITDA1

(In € million)

Bookings

Net Debt

Net debt3 / Adjusted EBITDA

2.479 2.518 2%

102,9 107,6 5%

31,8 22,5 (29)%

9,1 3,1 (66)%

139,5 108,9 (22)%

(358,0) (348,6) (3)%

3,18x 3,19x 0%




Outlook- CEO

Appendix

15


Action Plan

� Short Term

− Issues coming from increase in variable costs, and in particular in Search

− Focus on Margin stabilization: in the short term trade-off some revenue growth in exchange for

margin stabilization

− Stay away from “bad quality” (low margin) revenue growth

� Focus on Long Term

− Execute on IPO Strategy

− In particular deliver on 10 key initiatives which will allow us to go back to “quality growth” :

growth with sustained margins

− These initiatives require deployment and roll out of new technology which will be completed by

FQ2 of next year, but this will come gradually

− Precedent in deployment of One Platform shows how Capex investment in superior technology

derives strategic advantage and financial results

Accelerate Top Line

Grow weight on cost

effective Acquisition Channels

Others ways to improve

margin


Key issues and Strategic Initiatives

Competitive Pressure

Google Algorithm

Change Meta

Behaviour

Increase Fixed Costs

Merchant Call Centres

Platform UnificationInvestments in Search OptimizationInternational ExpansionNon-FlightsNon Transactional RevenueMobileWhite label + XMLCRMOff-LineCall Centers

� � ��

16

Bookings evolution on recent launches

17

Note: Netherlands site under eDreams brand launched in end 2013Source: Business intelligence

-

200

400

600

800

1,000

1,200

Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

Russia Greece Netherlands (eDreams)

� Strong growth of Expansion at +13%

� Good growth in recently launched sites Netherlands (eDreams launch) & Greece with respectively 114% and 134% average month on month growth on bookings.

� New Launch: Russia

� New Launch Meta: USA


Internationalization


Non – Flights: Improvements in Dynamic Packaging

Main Actions implemented in eDreams brand Dynamic Packages

• Single platform and access to superior content

• Flight (Regular, and lowcost, package fares)

• Hotel (Pre and post pay; package rates)

• Aggressive and active pricing focus on revenuemanagement

• Stronger marketing support particularly in SEM

• Better customerexperience throughimproved front end

eDreams** Quarterly DP top line growth(bookings @ booking date YoY%)

16%33%

FQ1 FQ2 (QTD)*

eDreams** Quarterly DP revenue growth(Revenue margin @ booking date YoY%)

21%40%

FQ1 FQ2 (QTD)*

*QTD at August 16th, 2014** eDreams brand has been implementing improvements earlier than the rest of brands*** Group data excludes Travellink

18

19

1

2 3

4

1. User enters origin/ destination and dates

2. Co-Search opens in bottom part of search.

• Comparison of eDreams results with external partners is offered.

• 1 to 3 partners are pre checked, others can be actively selected by user.

3./4. After clicking on “search flights”:

• eDreams results page

• In parallel a popunder window opens with a waiting page (3)

• Then redirect the user to the results page of the external partner (4)


Co-search: How it works

20

Mobile contribution

% of eDreams ODIGEO total flight orders from mobile1

1 Orders include delivered (“bookings”) and non-delivered transactions (e.g. non-processed transactions due to credit card issues, fraud etc); 2 Unaudited

Source: Company data, Phocuswright Goobal online Travel Overview third edition

3,394,564

downloaded apps

+68% compared to last year


Mobile continues its strong growth

Mobile

14%

Desktop

86%

This compares to European online bookings average of 11% in 2013, and 15% expected for 2014

Mobile8%

Q1 2013/14

Q12014/15

21

Last Year Q1 2014 Q2’14 through Q2’15

Flights & Hotels*

iPhone Opodo

Flights & Hotels*

iPhone eDreams

Flights

iPhone Go Voyages

Flights, Hotels* & Cars*

Smartphone Opodo


iPad html 5 Go Voyages

Hotels*iPhone Go Voyages

Flights & Hotels

Android1 Opodo

Flights & Hotels

Android1 eDreams


iPad html 5 eDreams


iPad html 5 Opodo


Smartphone eDreams


Smartphone Go Voyages eDreams, Opodo and Go Voyages

Feature Launch up to Q2’15 (all brands/all devices/flights only)

*: Indicates that the application is either a third party web view or white label1: Indicates that the application is web view (not native)


Mobile roadmap

� Easier Booking

� New Generation Flight Search

� In-travel

� Marketing Improvements

� Payment Improvements

� Ancillaries and Inventory

CRM orders year-on-year evolution � Good performance of our CRM strategy

− Drop-off emails

− Cross selling

− General newsletters

� CRM orders now contributing to 3.8% of total orders (excluding white labels)

22

54,070 50,480

75,566 80,103

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Quarter ended

March

Quarter ended

June

2013 2014


CRM strong growth in orders




Outlook- CEO

Appendix

24


Short Term Outlook 1/2

� We are seeing similar levels of competitiveness in FQ2 vs. FQ1 and expect similarlevels to remain during the year

� In the Short Term, we have acted to:

� Keeping our Rev Margin/Gross Booking high as we believe this is the key toultimate success in the industry

� Reducing the weight of some of the most expensive customer acquisitionchannels with the goal to defend margins with some trade-off of lower revenuegrowth

� Stayed away from getting into “low quality” short term revenue growth options

25


Short Term Outlook 2/2

� Revenue margin for FY 14/15 to be flat vs last fiscal year

� Profitability levels for FY 14/15 to remain in line with performance of

the quarter ended June

� We expect some variability around these levels on a quarterly basis,

mostly driven by seasonality

� In particular for the second quarter, we expect revenue margin growth to

be below and profitability to be above the levels mentioned

� We reiterate capex guidance provided in year-end: will invest €5 to 10

million in additional Capex in projects which will improve profitability of

Customer Services Operations, Marketing acquisition and Retention, and

Overhead productivity. Adding €25 million in platform development and

maintenance capex, this would imply a total capex of around €30-35 million.

� We believe our ability to deploy significant Capex in an effective manner to

improve our technology platform is a key advantage that will allow us to have a

positive long term outlook

26


Long Term Fundamentals

� We believe we remain in a very large and attractive market

− Structural Growth expected to come from Travel market Growth post-Recession, plus

increased Online Penetration, and increased share of OTAs vs. Supplier Direct in our core

and expansion markets

− European Online Travel Market expected to grow at 8% in 2015

� eDreams ODIGEO long term competitive advantages remain unchanged

− Scale (Largest OTA worldwide in Flights Revenue, 15 million customers)

− Established Brands

− Technology advantage

� Key set of Technology driven initiatives to fuel growth and margins, which follow

our core strategy as defined at IPO, many of which are already delivering initial

results in tests, with full deployment of technology expected by FQ2 next year

27


Strong Competitive Advantages

… while generating higher margins than competitors

Flight Revenue margin / Gross bookings

1.8x

2.5x

3.4x4.3x

Source: eDreams ODIGEO flight revenue margin /Gross bookings for the quarter ending June 2014, Unaudited. Peer companies’ figures based on a commissioned report to PhoCusWright, taking into account the higher quarterly Flight Revenue margin / Gross bookings over the Oct-12 to Sep-13 period

8.4%8.9%

4.8%3.5%

2.6% 2.1%

Q1 Jun-13 Q1 Jun-14

Continue creating value for customers by driving prices down …

Yields per passenger miles

Gross bookings per

booking Flight

Source: eDreams ODIGEO flight Gross bookings per booking for the quarter ending June 2014 compared to Airline yields per passenger kilometre for the quarter ending June 2014 (Bloomberg & quarterly reports)

(5)% (6)%(4)%

(3)%(0)%

Note: Ctrip and Bravofly Adjusted EBITDA margin relates to last fiscal yearSources: Company data, unaudited. Peer’s company quarterly June 2014 and last annual reports. Bravofly figures based on H1 preliminary figures reported on July 28, 2014. Ctrip figures based on last annual report.

Quarterly Adjusted EBITDA margin

Adjusted EBITDA / Revenue margin – Quarter ended June 2014

21%

26%

17% 18% 17%

28


Long Term Outlook

� We believe the attractiveness of our Market, our strong Market Position and Scale,

our Strategy and ability to deploy Capex, and transform it into Technology

advantage, will allow us to win in this market in the long term

� While we will see some challenges in the short term, we believe once our key

initiatives are fully rolled out, we will be able to go back to revenue growth at or

above market average, and with margins above those of our competitors




Outlook- CEO

Appendix

30

EBIT

Financial result

Adjusted net income

Net income

Var

Bookings

Q1

Jun.14

Q1

Jun.13

Revenue margin

Variable costs

Fixed costs

Adjusted EBITDA

Non recurring items

EBITDA

Depreciation & amort.

Incl. impairment

(In € million)

Income tax

Note: Unaudited

� Lower non recurring items driven by LTI related expenses recognized last year but not this year

� D&A decreased by €1.2m mainly due to full amortization of the IT technology of Opodo in March 2014, initially recognized for the Purchase Price Allocation (PPA)

� Financial loss increased by €2.1m due to:

− the partial redemption of the 2019 Notes with:

� €2.2m due to the cancellation of capitalized financing fees without cash effect

� €3.6m prepayment premium

− Partly mitigated by the absence (due to consolidation) of the Subordinated Convertible Shareholders’ bonds versus last year amounting to €3.3m

� Lower income tax mainly reflecting to business trends in countries where we operate and pay taxes such as Spain, differences in tax rate between deferred and current taxes related to LTI plan as well as the use of capital allowance and the reduction in the tax rate in UK


Income statement - Highlights

2,479 2,518 2%

102.9 107.6 5%

(57.4) (70.1) 22%

(13.6) (15.0) 10%

31.8 22.5 (29)%

(2.9) (0.6) (79)%

29.0 21.9 (24)%

(6.5) (5.3) (18)%

22.5 16.6 (26)%

(14.9) (17.0) 14%

(3.7) (2.1) (43)%

3.8 (2.6) N.A.

9.1 3.1 (66)%

31


Adjusted Net income

Net income

Non-recurring items1

Cancellation of amortized financing fees3

Interest expense penalty

(In € million)

Impact of Opodo’s PPA software

amortization4

Interests related to Subordinated

Convertible Shareholder Bonds3

Adjusted net income

Q2

Jun-14

Q1

Jun-13Var

1 Theoretical income tax rate of 35%2 Theoretical income tax rate of 28.8%3 Theoretical income tax rate of 34.43%4 Theoretical income tax rate of 23%Note: Unaudited

3.8 (2.6) N.A.

1.9 0.4 (79)%

- 1.7 N.A.

- 3.6 N.A.

1.3 - (100)%

2.2 - N.A.

9.1 3.1 (66)%

� Non-recurring items last year mostly related to LTI (details in Appendix)

� Financing fees relating to the reversal of capitalized financing fees following the partial redemption of 2019 Notes

� Premium paid in connection with the partial redemption of 2019 Notes

� Impact of Opodo’s PPA software amortization last year

32

Goodwill

Other fixed assets

Jun - 13

Total fixed assets

Total working capital

Deferred tax

Provisions

Other long term assets / (liabilities)

Financial debt

Cash and cash equivalent

Net financial debt

Subordinated Convertible Shareholder

Bonds

Net assets

(In € million)Jun - 14

Other short term assets / (liabilities)

Cash and cash equivalent – Net of overdrafts

Note: Unaudited

Versus last year, main changes relate to:

� The IPO effect on equity and the Financial Debt with the elimination in consolidation of Convertible Shareholders Bonds (-€106.5m) and the partial repayment of 2019 notes (-€46m) with the gross proceeds of the newly issued shares

� The acquisition of Liligo increasing the goodwill

Other changes deal with:

� A decrease in Fixed assets following the March impairment on GO Voyages brand partly offset by the new IT software internally developed.

� A decrease in the negative working capital

� A decrease in the provision following the end of the previous LTI plan (-€5.1m) and the decrease in provision in Opodo (-€5.2m) partly mitigated by the Travelport Provision

� A Decrease in the net deferred tax liabilities driven by redemption of Subordinated Convertible Shareholders’ Bonds as well as items related to March 14 impairment on PPA assets


Balance sheet - Highlights

873.1 877.9

318.5 309.8

1,191.5 1,187.6

(288.2) (258.2)

(57.0) (40.8)

(16.7) (13.6)

12.5 6.0

0.1 0.1

(497.5) (457.5)

139.5 108.9

(358.0) (348.6)

(106.5) -

377.7 532.5

139.3 108.9

Quarterly working capital

33

GEO Travel Finance

Note: Unaudited


Working capital - Highlights

Decrease in negative working capital vs June 2013 by €30.0m due to:

� The decrease in negative working capital (excluding non current deferred income) by €25.8m mainly related to:

− Late payment in June 2013 of German and Nordics BSP (-€11.0m)

− Some effects related to business trends and mainly to the change in mix between GDS and direct connect (-€17.9m)

− The impact of Liligo positive working capital (-€1.9m)

− The impact of payables related to committed capex (+€3.1m)

− Other effects (+€1.9m)

� The decrease in non current deferred income due to the recognition of €4.1m of revenue related to the Amadeus signing bonus over the period (no cash impact)

(249.8) (232.8)(192.6)

(250.6)(220.4)

(249.8)(223.9)

(38.4)(37.3)

(36.9)

(35.6)

(34.3)

(38.4)

(34.3)

(288.2)(270.1)

(229.5)

(286.2)

(254.7)

(288.2)

(258.2)

(350)

(300)

(250)

(200)

(150)

(100)

(50)

-

Jun.13 Sep.13 Dec.13 Mar.14 Jun.14 Jun.13 Jun.14

in €

mil

lio

n

Working capital Non current deferred income

Net increase/(decrease) in cash

34

Change in WC (excl. IPO impact)

Income tax paid

Net cash from operating activities

Cash flow from investing activities

Shares issuance

Cash flow from financing

Repayment of 2019 Notes

Premium on repayment

Adjusted EBITDA

Q1

Jun - 13

Non recurring items

(In € million)

Q1

Jun - 14

Non operating / non cash items

Change in WC related to IPO

Note: Unaudited

Financial expenses (net)

Other debt issuance/ (repayment)

� Non operating / non cash items decreased by €1.7m mainly reflecting the absence of LTI expenses in Q1 2014

� Change in working capital excluding IPO impact of €(24.0)m and mainly reflecting the impact of seasonality in BSP payable as March is usually the highest trading month for regular flights (€24.2m)

� Change in WC related to IPO of €15.5m and mainly related to the payment IPO expenses

� Income tax paid increased by €1.5m due to an advance payment towards US Tax authority

� Increase in capex reflecting the push in engineering

� Partial redemption of 2019 Notes by €46.0m plus an early repayment fee of €3.6m with the €50m proceeds of share issuance

� Financial expenses in line with last year and reflecting the payment in April of 2019 Notes interest.


Cash flow statement - Highlights

31.8 22.5

(2.9) (0.6)

1.8 0.1

(32.2) (24.0)

- (15.5)

(2.0) (3.5)

(3.5) (21.0)

(5.2) (6.1)

- 50.0

- (46.0)

- (3.6)

(0.0) (0.2)

(10.2) (9.8)

(10.3) (9.6)

(18.9) (36.7)

35

Net debt excl. capitalization of financing costs

Quarterly ratios of net debt excl. capitalization of financing costs

GEO Travel Finance

Note: Unaudited


Net debt information

� Undrawn revolving credit facilities end of June 2014

� June 2014 net debt excl. capitalization of financing costs lower by €14.2 million vs last year (€375.7 million) mainly due to:

− The repayment of €46 million of 2019 Notes following the IPO

− Which has been partly mitigated by the impact on cash of the acquisition of Liligo in October 2014

(375.9) (386.2)(432.2)

(369.9) (362.1) (369.2) (361.6)

(500)

(400)

(300)

(200)

(100)

-

Jun.13 Sept.13 Dec.13 Mar.14 Jun.14 Mar.14 Jun.14

In €

mil

lio

n

(3.4) (3.4)(3.7)

(3.1) (3.3) (3.1) (3.3)

(1.7) (1.7)(2.0)

(1.5)(2.0)

(1.5)(2.0)

(4)

(3)

(2)

(1)

-

Jun.13 Sept.13 Dec.13 Mar.14 Jun.14 Mar.14 Jun.14

x LT

M R

ecu

rrin

g

EB

ITD

A

Net debt (excl. capitalized financing costs) / LTM Adj. EBITDA

Net senior secured debt (excl. capitalized financing costs) / LTM Adj. EBITDA

36

Total Net Debt(*)

LTM Adjusted EBITDA3.19x

TOTAL DEBT COVER RATIO (TOTAL NET DEBT / LTM Adj. EBITDA)

*IFRS net debt is calculated after deducting the financing fees capitalizedNote : Covenants figures presented above are unaudited and at GEO Travel Finance level


Covenants

3.19x

2.31x

5.50x

-

1

2

3

4

5

6

Jun.14 Headroom Ratio cap

x LT

M A

dj.

EB

ITD

A

37Source: Management accounts, unaudited

GEO Travel Finance


Per booking evolution

Jun-12 Sep-12 Dec-12 Mar-13 2012/13 Jun-13 Sep-13 Dec-13 Mar-14 2013/14 Jun-14 Jun-13 Jun-14 2012/13 2013/14

Number of bookings (in '000)

Total 2,176 2,198 1,926 2,429 8,728 2,479 2,580 2,202 2,536 9,797 2,518 2,479 2,518 8,728 9,797

By product:

Flight 1,967 1,981 1,753 2,249 7,949 2,237 2,278 1,997 2,347 8,859 2,261 2,237 2,261 7,949 8,859

Non Flight 209 217 173 180 779 243 301 205 189 938 257 243 257 779 938

By region:

Core 1,415 1,409 1,201 1,517 5,542 1,526 1,583 1,293 1,475 5,877 1,508 1,526 1,508 5,542 5,877

Expansion 761 789 725 912 3,186 954 997 909 1,061 3,920 1,010 954 1,010 3,186 3,920

P&L per booking

Revenue margin 42.7 42.0 43.0 43.2 42.7 41.5 42.5 45.1 46.0 43.7 42.8 41.5 42.8 42.7 43.7

Flight 38.5 36.2 38.7 40.1 38.4 38.0 38.6 39.2 41.1 39.3 37.9 38.0 37.9 38.4 39.3

Non Flight 82.8 94.9 87.2 82.1 87.0 73.6 71.9 102.8 106.5 86.1 85.2 73.6 85.2 87.0 86.1

Core 43.6 42.9 45.0 45.1 44.2 43.3 42.6 47.2 49.2 45.4 43.8 43.3 43.8 44.2 45.4

Expansion 41.2 40.3 39.7 39.9 40.3 38.6 42.3 42.2 41.6 41.2 41.2 38.6 41.2 40.3 41.2

Variable costs (23.5) (23.5) (23.6) (25.5) (24.1) (23.2) (25.7) (25.0) (29.1) (25.8) (27.9) (23.2) (27.9) (24.1) (25.8)

Fixed costs (6.0) (6.0) (6.9) (6.1) (6.2) (5.5) (5.0) (8.0) (5.5) (5.9) (5.9) (5.5) (6.0) (6.2) (6.0)

Total costs (29.5) (29.5) (30.5) (31.6) (30.3) (28.7) (30.8) (33.0) (34.6) (31.7) (33.7) (28.7) (33.8) (30.3) (31.7)

Adjusted EBITDA 13.3 12.5 12.5 11.6 12.4 12.8 11.8 12.1 11.4 12.0 9.0 12.8 8.9 12.4 12.0

Margin 31% 30% 29% 27% 29% 31% 28% 27% 25% 27% 21% 31% 21% 29% 27%

38

Note: Core relates to Bookings from France, Spain, Italy. Expansion relates to Bookings from UK, Germany, Nordics and Other countriesSource: Management accounts, unaudited

Bookings growth

Bookings breakdown by segment

2,479 2,518

-

500

1,000

1,500

2,000

2,500

3,000

Bookings

Q1 Jun.13

Bookings

Q1 Jun.14

In t

ho

usa

nd

s

1,526 954

1,508 1,010

-

500

1,000

1,500

2,000

Core Expansion

In t

ho

usa

nd

s

Bookings Quarter ended June 2013 Bookings Quarter ended June 2014

(1)%

� eDreams ODIGEO has achieved 2% growth in volumes in the quarter ended June 30, 2014 vs last year.

� On a segment basis:

− Slight decrease on Core market due to competitive environment

− Expansion growing at 6%


Volume growth

39


Adjusted EBITDA - Bridge

Adjusted EBITDA bridge – Quarter ended June 2014 vs quarter ended March 2014

Note: Unaudited

� The comparison between the Q1 of this fiscal year and the previous quarter, Q4 of last fiscal year, presents results broadly in line with the comparison vs the Q1 of last year

� Basis of preparation (Applicable to all adjusted EBITDA bridges included in this presentation):

− “Competitive pressure & Google algorithm” is the aggregation of:1. The variance, from a quarter to the other between (i) in the revenue margin generated through the Google acquisition channel, netted

from acquisition costs associated to this channel and (ii) the revenue margin and costs we would have incurred by applying, from January 2014 to June 2014, the same seasonality in the Google revenue margin and acquisition costs, than the one experienced over the same period in 2013;

2. The variance, from a quarter to the other, in the revenue margin generated through the metasearch acquisition channel, netted from any acquisition costs associated to this channel and excluding the impact shown specifically in the “Meta partner” effect.

Country scope for “Competitive pressure & Google algorithm” includes (i) France, UK, Germany, Spain and Italy for Google excluding airlines branded keywords and metasearch and (ii) all our markets for the Google airline branded keywords

− “Meta partner” calculated as the variance, from a quarter to the other in the revenue margin generated through this specific meta partner, netted from acquisition costs towards this meta partner.

− “Fixed costs” calculated as the variance in fixed costs reported from a quarter to the other.

− “Other” corresponds to the variance in adjusted EBITDA from a quarter to the other not captured in any of the previous effects shown in the bridge (i.e. “Competitive pressure & Google algorithm”, “Meta partner” and “Fixed costs”).

28.7 22.5

(4.0)(0.6) (0.6) (1.0)

0

5

10

15

20

25

30

35

Adjusted EBITDA

Quarter ended Mar-14

Competitive pressure

& Google algorithm

Meta partner Fixed costs Other Adjusted EBITDA


In €

mil

lio

n

40

EBIT

Financial result

Net income

Var

Bookings

Q1

Jun - 14

Q1

Jun - 13

Revenue margin

Variable costs

Fixed costs

Adjusted EBITDA

Non recurring items

EBITDA

Depreciation & amort.

Incl. impairment

(In € million)

Income tax

Goodwill

Other fixed assets

Jun - 13

Total fixed assets

Total working capital

Deferred tax

Provisions

Other long term assets / (liabilities)

Financial debt

Cash and cash equivalent

Net financial debt

Subordinated Convertible Shareholder

Bonds

Net assets

(In € million)Jun- 14

Other short term assets / (liabilities)

Cash and cash equivalent – Net of overdrafts

INCOME STATEMENT BALANCE SHEET

Gross bookings

Note: Unaudited

1,143.4 1,092.8


Geo Travel Finance (1/2)

2,479 2,518 2%

102.9 107.6 5%

(57.4) (70.1) 22%

(13.6) (14.8) 8%

31.8 22.7 (29)%

(2.9) (0.4) (85)%

29.0 22.3 (23)%

(6.5) (5.3) (18)%

22.5 17.0 (24)%

(14.9) (20.6) 38%

(3.7) (2.2) (40)%

3.8 (5.8) N.A.

873.1 877.9

318.4 315.9

1,191.4 1,193.7

(288.2) (254.7)

(57.0) (51.1)

(16.7) (13.6)

12.5 6.0

0.1 0.2

(497.5) (457.5)

139.4 108.4

(358.1) (349.1)

(106.5) (121.0)

377.5 410.4

139.2 108.4

41

Non operating / non cash items

Change in working capital

Income tax paid

Net cash from operating activities

Adjusted EBITDA

Q1

Jun - 13

Non recurring items

(In € million)

Q1

Jun - 14

Total Net Debt(*)

LTM Adjusted EBITDA3.19x

TOTAL DEBT COVER RATIO (TOTAL NET DEBT / LTM Adj. EBITDA)

CASH FLOW STATEMENT COVENANT CALCULATION

Cash flow from investing activities

Cash flow from financing

Note: Unaudited


Geo Travel Finance (2/2)

3.19x

2.31x

5.50x

-

1

2

3

4

5

6

Jun.14 Headroom Ratio cap

x LT

M A

dj.

EB

ITD

A

Shares issuance

Repayment of 2019 Notes

Penalty fee on repayment

Financial expenses (net)

Other debt issuance/ (repayment )

Drawing/(repayment) bw. Group entities

31.8 22.7

(2.9) (0.4)

1.8 0.1

(32.1) (33.6)

(2.0) (3.5)

(3.4) (14.7)

(5.2) (6.1)

- 50.0

- (46.0)

- (3.6)

(0.0) (0.2)

- (6.1)

(10.2) (9.8)

(10.3) (15.7)

42


Consolidated financial statements – Profit & Loss

� The Profit and Loss

accounts presented here

show quarterly

information for the for

the April 1st to June 30th

2013 and 2014

� Financial result is

prepared under IFRS and

includes mainly interest

paid or accrued as well

as the amortization of

the financial expenses.

Difference between Geo

Travel Finance and

eDreams ODIGEO mainly

relate to the interest

expenses on

Subordinated Convertible

Shareholders’ bond

Note: Unaudited

Consolidated Income statementeDreams

ODIGEO

eDreams

ODIGEO

Geo Travel

Finance

Geo Travel

Finance

In € thousand

Q1

June 2014

Q1

June 2013

Q1

June 2014

Q1

June 2013

Revenue 118,269 125,683 118,269 125,683

Supplies (10,625) (22,763) (10,625) (22,763)-

Revenue margin 107,644 102,920 107,644 102,920 -

Personnel expenses (16,387) (15,109) (16,387) (15,109)

Operating expenses other than depreciation and amortization (68,734) (55,977) (68,516) (55,971)-

Operating profit before depreciation and amortization 22,524 31,834 22,742 31,840 -

Depreciation and amortization (5,319) (6,507) (5,321) (6,507)

Impairment (4) - (4) -

Other income & Other expense (non recurring items) (602) (2,865) (422) (2,865)

Gain or loss arising from investments 1 - 1 - -

Operating profit 16,599 22,462 16,996 22,468 -

Financial result (17,034) (14,911) (20,554) (14,912)Income (loss) of associates accounted for using equity method - - - -

Discontinued operations - - - -- -

(Loss) profit before tax (435) 7,551 (3,558) 7,556 -

Income tax benefit (expense) (2,122) (3,716) (2,225) (3,716)0

(Loss) profit after tax (2,557) 3,835 (5,783) 3,840

Non controlling interest - Result - - - - Profit for the year attributable to equity holders of the

parent (2,557) 3,835 (5,783) 3,840 -

EBITDA attributable to equity holders of the parent 21,922 28,969 22,319 28,975

Adjusted EBITDA 22,524 31,834 22,742 31,840

Non recurring items (602) (2,865) (422) (2,865)

43


Consolidated financial statements – Balance Sheet

Note: Unaudited

Consolidated balance sheeteDreams

ODIGEO

eDreams

ODIGEO

Geo Travel

Finance

Geo Travel

Finance

In € thousand

30 June

2014

30 June

2013

30 June

2014

30 June

2013

LIABILITIES & EQUITY

Capital 10,488 234,007 261,638 236,638

Additional paid-in capital 207,413 237,939 260,207 235,207

Retained earnings 317,520 (102,768) (105,306) (102,909)

Net income / (loss) (2,557) 3,835 (5,783) 3,840

Adjustments for changes in value (392) 4,722 (392) 4,722 q

Total equity 532,472 377,735 410,363 377,498

Non-current financial liabilities 441,007 588,797 562,041 588,797

Non current provisions 4,819 15,010 4,819 15,010

Deferred revenue 34,302 38,449 34,302 38,449

Deferred tax liabilities 48,454 66,030 58,743 66,030

Other non-current liabilities - - - 0

Total non-current liabilities 528,582 708,286 659,905 708,286

Trade and other payables 312,087 346,108 312,867 346,071

Current provisions 8,782 1,713 8,782 1,713

Current taxes payables 6,560 11,014 5,573 11,012

Current financial liabilities 16,477 15,177 16,477 15,177

Total current liabilities 343,906 374,012 343,698 373,972

TOTAL LIABILITIES & EQUITY 1,404,960 1,460,033 1,413,967 1,459,756

Consolidated balance sheeteDreams

ODIGEO

eDreams

ODIGEO

Geo Travel

Finance

Geo Travel

Finance

In € thousand

30 June

2014

30 June

201330 June

2014

30 June

2013

ASSETS

Goodwill 877,852 873,062 877,852 873,062

Other intangible assets 301,421 308,665 301,421 308,665

Tangible assets 5,477 4,907 5,477 4,907

Non-current financial assets 5,457 8,830 8,971 4,786

Deferred tax assets 7,633 9,062 7,633 9,062

Other non-current assets 3,436 8,547 6,022 12,491

Total non-current assets 1,201,276 1,213,073 1,207,377 1,212,972

Trade and other receivables 84,728 101,612 88,036 101,570

Current tax assets 9,979 5,748 9,968 5,745

Financial assets 69 72 160 72

Cash and cash equivalent 108,908 139,528 108,427 139,397

Total current assets 203,684 246,960 206,591 246,784

TOTAL ASSETS 1,404,960 1,460,033 1,413,967 1,459,756

44


Consolidated financial statements – Cash Flow

Note: Unaudited

Consolidated statement of cash flowseDreams

ODIGEO

eDreams

ODIGEO

Geo Travel

Finance

Geo Travel

Finance

In € thousand

QTD

June 2014

QTD

June 2013

QTD

June 2014

QTD

June 2013

Net Profit / (Loss) (2,557) 3,835 (5,783) 3,840

Depreciation and amortization 5,319 6,507 5,321 6,507

Impairment 3 - 4 -

Other provisions 98 332 98 332

Income tax 2,122 3,716 2,225 3,716

Gain or loss on disposal of assets - 1 (1) -

Finance (Income) / Loss 17,034 14,911 20,554 14,912

Expenses related to share based payments (4,887) 1,431 (5,475) 1,432

Other non cash items - (1) - -

Change in working capital (34,627) (32,156) (28,140) (32,108)

Income tax paid (3,526) (2,026) (3,526) (2,026)

Net cash from operating activities (21,021) (3,450) (14,724) (3,395)

Acquisitions of intangible and tangible assets (5,996) (5,167) (5,996) (5,167)

Proceeds on Disposal of tangible and intangible assets 1 - 1 -

Acquisitions of financial assets (89) - (89) -

Payments/ Proceeds from disposals of financial assets - 18 - 18

Acquisitions of subsidiaries net of cash acquired - (15) - (15)

Net cash flow from / (used) in investing activities (6,084) (5,164) (6,084) (5,164)-

Proceeds of issues of shares 50,000 - 50,000 -

Borrowings drawdown - - - -

Reimbursement of borrowings (46,164) (37) (46,164) (37)

Drawing/Repayment of loans between eDreams ODIGEO group entities - - (6,100) -

Interests paid and other expenses (9,848) (10,272) (9,848) (10,270)

Interests received 37 48 37 48

Early repayment fees (3,579) - (3,579) -

Dividends paid - - - - 0 - - -

Net cash flow from / (used) in financing activities (9,554) (10,261) (15,654) (10,259)

Net increase / (decrease) in cash and cash equivalent (36,659) (18,875) (36,462) (18,818)

Cash and cash equivalents at beginning of period 145,994 159,156 145,316 158,967

Effect of foreign exchange rate changes (476) (995) (476) (995)

Cash and cash equivalents at end of period 108,859 139,286 108,378 139,154

45


Net debt analysis

2019 Notes

Revolving Credit Facilities

Other debts (finance lease, overdrafts, etc.)

Net debt excluding capitalization of financing costs

Cash and cash equivalents

Accrued interest

Jun-13 Dec-13 Mar-14 Jun-14

2018 Notes

Net debt – as per balance sheet

Financing costs and amortizations

Capitalization of financing costs

Note: Unaudited

(175.0) (175.0) (129.0)

(325.0) (325.0) (325.0)

- - -

(13.2) (11.6) (12.4)

(6.9) (3.7) (4.1)

89.6 146.1 108.9

(430.4) (369.2) (361.6)

16.5 15.9 13.0

3.0 2.9 2.7

(410.9) (350.4) (345.8)

(175.0)

(325.0)

-

(13.2)

(2.1)

139.5

(375.7)

17.8

3.3

(354.7)

46


Non recurring items

Q1

Jun-14

Q1

Jun-13

Other non recurring items

Non recurring items

LTI plan 2.0 -

0.9 0.6

2.9 0.6

Note: Unaudited

47


Attractive Market

� Worldwide Travel Market recovering from recession and expected to accelerate from 3.2% in

2013 to 5.8% in 2015, where it will reach 1,328 USD Billion in size

� Worldwide Online Travel Penetration expected to continue growing from 33,7% in 2013 to

37% in 2015

� Europe, our core market is the largest Travel Market in the world with 330 USD Billion and also

the largest Online Travel market in the world with 141 USD Billion (ahead of US with 129 USD

billion)

� Online Travel Market expected to grow at 8% in Europe in 2015 and 6% in the US, with rest of

markets growing double digit

� Within Online Travel, OTAs expected to grow share from Supplier direct in Europe (from 39%

in 2013 to 41% in 2015)

� eDreams ODIGEO lacks sizeable presence in the worlds number 1 (US), 5 (Japan), 6 (China) and 9

(Russia) online travel markets. Significant opportunity

� Air remains by far the largest Travel Category with 45% of Worldwide Total Travel Bookings

(with hotels being the second category at 36% )

Source: PhocusWright Global Online Travel Overview, Third Edition (July 2014)

48


Leadership in flight

1 eDreams ODIGEO shows revenue margin ( = IFRS Revenue less cost of supplies), for flight product and services, while competitors show net sales related to flight products, excluding any supplier costs; 2 Estimated based on preliminary H1 figures as of June 2014 and assuming flight percentage of revenue is the same than in December 2013 (i.e. 82%); 3 Air/non air split not disclosed. Flight revenue assumed to be 1.7% of total revenue (Source: Forbes article published 10.01.2013), applied to gross profit; Note: Financials represent last fiscal year reported or LTM as of June 2014 for competitors (except Orbitz and Priceline where LTM as of March 2014) when quarterly informationavailable. FX used EUR/USD: 1.3421Source: Company data unaudited, peer companies’ public reports

Leading online retailer of flights worldwide

349

321

306

187

110

94(est.)

Flight revenue (June 2014 LTM), €m1

1.1x

1.9x

3.7x

3

4

2

3.2x

1.1x

Documents

eDreams ODIGEO June 2014 Quarterly Results - 20140829 · 2016-02-08 · Meta partner impact − Higher merchant costs by 3.2 pts vs last year due to an increased weight of ... revenue